ACCORDING TO ABS DATA, OWNER OCCUPIED HOUSEHOLDS HAD A HIGHER LEVEL OF NET WEALTH THAN THOSE THAT RENT.
With households in Perth having, on average, net property assets of $420,700, it is clear that property continues to underpin wealth accumulation throughout people’s lives, whether it is through the family home or other real estate investments. According to ABS Data, owner occupied households had a higher level of net wealth than those that rent.
Caroline Daley, Director of the Living Conditions section at the ABS, said that households that owned their home outright had an average net worth of $1,237,000. Households with a mortgage had an average net worth of $790,000 whilst households that rent their home had an average net worth of $160,000.
The number of people that have mortgages in Perth reflects of our high population growth with many migrants buying into property over the last decade. Perth has the highest percentage of households with a mortgage (40.9%), but had the lowest percentage of people that owned their own home of any capital city except Darwin.
In Perth home equity makes up, on average, 40 per cent of total household networth with Sydney (46%) and Melbourne (45%) the highest in Australia. Given the number of people with mortgages and our high migration rate, 40 per cent is a very positive result.
In Perth the average value of owner occupied dwellings was $411,000 with the average mortgage of $93,900. The average value of owner occupied dwellings for the rest of WA was $316,100 with a debt of $72,800.
Equity in other property, such as holiday homes and investment properties, makes up a further 13.08% percent of net assets in Perth. ACT leads the country in “other property” at 25.25% of net assets followed by Sydney on 13.95%.
This week the ABS released their House Price Index data for the December quarter which highlights how quickly people can gain from property. In Perth housing prices increased 3.5 per cent, coming in second behind the boyant Sydney market which returned 4.9 per cent for the quarter. “Attached” housing in Perth grew 2.6 per cent, again second behind Sydney which recorded value growth of 4.4 percent.
The average price of residential dwellings remains the highest in NSW at $633,200 followed by WA ($593,200) and the ACT ($568,300).
And if you are in any doubt about just how important property is, the total value of residential buildings in Australia hit 5,017 billion dollars in December, 95 per cent of which is privately owned.